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Work norms, social insurance and the allocation of talent

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  • Corneo, Giacomo

Abstract

This paper challanges the view that weak work norms in generous welfare states makes them economically unsustainable. I develop a dynamic model of family-transmitted values that has a laissez-faire equilibrium with strong work norms coexisting with a social-insurance equilibrium with weak work norms. While the former has better incentives, the latter induces more intergenerational occupational mobility which improves the allocation of talent and fuels growth. Strong work norms arise as a defensive strategy of parents that aims at perpetuating their occupation along family lines. I present evidence from microdata showing that generous social insurance correlates with high intergenerational occupational mobility and that more mobile individuals endorse weaker work norms.

Suggested Citation

  • Corneo, Giacomo, 2013. "Work norms, social insurance and the allocation of talent," Discussion Papers 2013/12, Free University Berlin, School of Business & Economics.
  • Handle: RePEc:zbw:fubsbe:201312
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    References listed on IDEAS

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    Cited by:

    1. Corneo, Giacomo, 2013. "Work norms, social insurance and the allocation of talent," Journal of Public Economics, Elsevier, vol. 107(C), pages 79-92.
    2. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.
    3. Guido Neidhöfer, 2016. "Intergenerational Mobility and the Rise and Fall of Inequality: Lessons from Latin America," CEDLAS, Working Papers 0196, CEDLAS, Universidad Nacional de La Plata.

    More about this item

    Keywords

    work norms; unemployment insurance; occupational mobility; economic growth.;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • Z1 - Other Special Topics - - Cultural Economics

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